Symbotic Inc.

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sym-20220625

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 25, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to

Commission file number 001-40175

SYMBOTIC INC.

(Exact name of registrant as specified in its charter)

Delaware

98-1572401

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

200 Research Drive

Wilmington, MA 01887

(978) 284-2800

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock, par value $0.0001 per share

SYM

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of August 4, 2022, the following shares of common stock were outstanding:

54,280,146 shares of Class A common stock, par value $0.0001 per share

80,844,573 shares of Class V-1 common stock, par value $0.0001 per share

416,933,025 shares of Class V-3 common stock, par value $0.0001 per share


TABLE OF CONTENTS
			Page
Part I - Financial Information			1
Item 1. Financial Statements			1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3. Quantitative and Qualitative Disclosures About Market Risk			38
Item 4. Controls and Procedures			38
Part II - Other Information			39
Item 1. Legal Proceedings			39
Item 1A. Risk Factors			39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			39
Item 3. Defaults Upon Senior Securities			39
Item 4. Mine Safety Disclosures			39
Item 5. Other Information			39
Item 6. Exhibits			39
Signatures			41

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, our expectations or predictions of future financial or business performance or conditions. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning our possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” or “intends” or similar expressions.

Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about our ability to, or expectations that we will:

•meet the technical requirements of existing or future supply agreements with our customers, including with respect to existing backlog;

•expand our target customer base and maintain our existing customer base;

•anticipate industry trends;

•maintain and enhance our platform;

•maintain the listing of the Symbotic Class A Common Stock on NASDAQ;

•develop, design, and sell systems that are differentiated from those of competitors;

•execute our research and development strategy;

•acquire, maintain, protect, and enforce intellectual property;

•attract, train, and retain effective officers, key employees, or directors;

•comply with laws and regulations applicable to our business;

•stay abreast of modified or new laws and regulations applicable to our business;

•successfully defend litigation;

•issue equity securities in connection with future transactions;

•meet future liquidity requirements and, if applicable, comply with restrictive covenants related to long-term indebtedness;

•timely and effectively remediate any material weaknesses in our internal control over financial reporting;

•anticipate rapid technological changes; and

•effectively respond to general economic and business conditions

Forward-looking statements made in this Quarterly Report on Form 10-Q also include, but are not limited to, statements with respect to:

•the future performance of our business and operations;

•expectations regarding revenues, expenses and anticipated cash needs;

•expectations regarding cash flow, liquidity and sources of funding;

•expectations regarding capital expenditures;

•the effects of pending and future legislation;

•business disruption;

•risks related to the impact of the COVID-19 pandemic on the financial condition and results of operations of Symbotic;

•disruption to the business due to our dependency on certain customers;

•increasing competition in the warehouse automation industry;

•any delays in the design, production or launch of our systems and products;

•the failure to meet customers' requirements under existing or future contracts or customer's expectations as to price or pricing structure;

•any defects in new products or enhancements to existing products; and

•the fluctuation of operating results from period to period due to a number of factors, including the pace of customer adoption of our new products and services and any changes in our product mix that shift too far into lower gross margin products.

Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. Certain of these risks are identified and discussed in our Registration Statement on Form S-1 (Registration No. 333-265906) filed with the U.S. Securities and Exchange Commission (“SEC”) on June 29, 2022 and amended on July 20, 2022. These risk factors will be important to consider in determining future results and should be reviewed in their entirety. These forward-looking statements are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that the events, results or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements are provided for the purposes of assisting the reader in understanding our financial performance, financial position and cash flows as of and for periods ended on certain dates and to present information about management’s current expectations and plans relating to the future, and the reader is cautioned not to place undue reliance on these forward-looking statements because of their inherent uncertainty and to appreciate the limited purposes for which they are being used by management. While we believe that the assumptions and expectations reflected in the forward-looking statements are reasonable based on information currently available to management, there is no assurance that such assumptions and expectations will prove to have been correct.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made and are based on the beliefs, estimates, expectations and opinions of management on that date. We are not under any obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any forward-looking statements made in this Quarterly Report on Form 10-Q, whether as a result of new information, future events or otherwise, except as required by law.

In addition to factors previously disclosed in our Registration Statement on Form S-1 (Registration No. 333-265906) filed with the SEC on June 29, 2022, and amended on July 20, 2022 and those identified elsewhere in this Quarterly Report on Form 10-Q, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: failure to realize the benefits expected from the business combination between SVF Investment Corp. 3 and Symbotic pursuant to that certain Agreement and Plan of Merger, dated December 12, 2021 (the “Merger Agreement”), by and among SVF, Warehouse Technologies LLC, Symbotic Holdings LLC and Saturn Acquisition (DE) Corp. that closed on June 7, 2022; the effects of pending and future legislation; and risks related to the impact of the COVID-19 pandemic on the financial condition and results of operations of Symbotic.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

In this Quarterly Report on Form 10-Q, the terms “Symbotic”, “we,” “us”, and “our” refer to Symbotic Inc. and its subsidiaries, unless the context indicates otherwise.

iii

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Symbotic Inc.

Unaudited Consolidated Balance Sheets

(in thousands, except share data)


	June 25, 2022		September 25, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	411,662	$	156,634
Accounts receivable	2,549		63,370
Inventories	126,985		33,561
Deferred expenses	550		489
Prepaid expenses and other current assets	49,435		6,366
Total current assets	591,181		260,420
Property and equipment, at cost	42,858		37,177
Less: Accumulated depreciation	(22,348)		(18,560)
Property and equipment, net	20,510		18,617
Intangible assets, net	800		1,164
Other long-term assets	340		334
Total assets	$	612,831	$	280,535
LIABILITIES, REDEEMABLE PREFERRED AND COMMON UNITS AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	96,995	$	28,018
Accrued expenses	51,081		31,131
Sales tax payable	6,625		18,405
Deferred revenue, current	290,406		259,418
Total current liabilities	445,107		336,972
Deferred revenue, long-term	88,613		216,538
Other long-term liabilities	5,983		3,993
Total liabilities	539,703		557,503

Commitments and contingencies (Note 11)	—		—

Redeemable preferred and common units:
Preferred units, Class B-1, 0 units authorized, issued, and outstanding at June 25, 2022 and 2 units authorized, 1 unit issued and outstanding at September 25, 2021	—		232,278
Preferred units, Class B, 0 units authorized, issued, and outstanding at June 25, 2022 and 1 unit authorized, issued, and outstanding at September 25, 2021	—		459,007
Common units, Class C, 0 units authorized, issued, and outstanding at June 25, 2022 and 428,571 units authorized, issued, and outstanding at September 25, 2021	—		144,975
Equity (deficit):

Table of Content s


Common voting units, Class A, 0 units authorized, issued, and outstanding at June 25, 2022 and 7,071,424 units authorized, 5,997,632 units issued and outstanding at September 25, 2021	—		16,809
Common shares, Class A, 3,000,000,000 shares authorized, 50,664,146 shares issued and outstanding at June 25, 2022	5		—
Common voting shares, Class V-1, 1,000,000,000 shares authorized, 60,844,573 shares issued and outstanding at June 25, 2022	6		—
Common voting shares, Class V-3, 450,000,000 shares authorized, 416,933,025 shares issued and outstanding at June 25, 2022	42		—
Additional paid-in capital - warrants	58,126		26,999
Additional paid-in capital	1,231,992		—
Accumulated deficit	(1,281,020)		(1,154,944)
Accumulated other comprehensive loss	(2,139)		(2,092)
Total stockholders' equity / members' deficit	7,012		(1,113,228)
Noncontrolling interest	66,116		—
Total equity (deficit)	73,128		(1,113,228)
Total liabilities, redeemable preferred and common units, and equity (deficit)	$	612,831	$	280,535

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Content s

Symbotic Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except share and per share information)


	For the Three Months Ended				For the Nine Months Ended
	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
Revenue:
Systems	$	169,503	$	125,268	$	330,297	$	142,028
Software maintenance and support	862		1,232		2,802		2,776
Operation services	5,187		4,987		15,801		15,401
Total revenue	175,552		131,487		348,900		160,205
Cost of revenue:
Systems	136,015		125,643		264,475		138,740
Software maintenance and support	1,269		702		3,224		2,257
Operation services	6,724		5,478		18,283		16,613
Total cost of revenue	144,008		131,823		285,982		157,610
Gross profit (loss)	31,544		(336)		62,918		2,595
Operating expenses:
Research and development expenses	35,140		20,934		80,679		52,477
Selling, general, and administrative expenses	29,435		16,508		68,306		41,007
Total operating expenses	64,575		37,442		148,985		93,484
Operating loss	(33,031)		(37,778)		(86,067)		(90,889)
Other income, net	156		7		236		59
Loss before income tax	(32,875)		(37,771)		(85,831)		(90,830)
Income tax benefit (expense)	—		—		—		—
Net loss	(32,875)		(37,771)		(85,831)		(90,830)
Net loss attributable to Legacy Warehouse unitholders prior to the Business Combination	(19,178)		(37,771)		(72,134)		(90,830)
Net loss attributable to noncontrolling interests	(12,383)		—		(12,383)		—
Net loss attributable to common stockholders	$	(1,314)	$	—	$	(1,314)	$	—

Loss per share of Class A Common Stock: (1)
Basic and Diluted	$	(0.03)	$	—	$	(0.03)	$	—
Weighted-average shares of Class A Common Stock outstanding:
Basic and Diluted	50,664,146		—		50,664,146		—

(1) Loss per share information has not been presented for periods prior to the Business Combination (as defined in Note 3, Business Combination), as it resulted in values that would not be meaningful to the users of these unaudited condensed consolidated financial statements. Refer to Note 3, Business Combination for further information.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Symbotic Inc.

Unaudited Consolidated Statements of Comprehensive Loss

(in thousands)


	For the Three Months Ended				For the Nine Months Ended
	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
Net loss	$	(32,875)	$	(37,771)	$	(85,831)	$	(90,830)
Foreign currency translation adjustments	(98)		1,024		(47)		2,936
Total comprehensive loss	(32,973)		(36,747)		(85,878)		(87,894)
Comprehensive loss attributable to Legacy Warehouse unitholders prior to the Business Combination	(19,192)		(36,747)		(72,097)		(87,894)
Comprehensive loss attributable to noncontrolling interests	(13,187)		—		(13,187)		—
Total comprehensive loss attributable to common stockholders	$	(594)	$	—	$	(594)	$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Symbotic Inc.

Unaudited Consolidated Statements of Changes in Redeemable Preferred and Common Units and Equity (Deficit)

(in thousands, except unit and share information)


	Three Months Ended June 25, 2022
	Redeemable Preferred and Common Units																					Additional Paid-In Capital - Warrants		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Noncontrolling Interest		Total Equity (Deficit)
	Common Units, Class C			Preferred Units, Class B-1			Preferred Units, Class B			Common Voting Units, Class A			Common Shares, Class A			Common Voting Shares, Class V-1			Common Voting Shares, Class V-3
	Units	Amount		Units	Amount		Units	Amount		Units	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance at March 26, 2022	428,571	$	168,613	1	$	238,085	1	$	470,482	6,444,373	$	217,604	—	$	—	—	$	—	—	$	—	$	—	$	—	$	(2,041)	$	(1,248,771)	$	—	$	(1,033,208)
Retroactive application of recapitalization ratio (1)	24,493,538	—		24,041,299	—		47,508,299	—		388,481,909	—		—	—		—	—		—	—		—		—		—		—		—		—
Adjusted balance, beginning of period	24,922,109	$	168,613	24,041,300	$	238,085	47,508,300	$	470,482	394,926,282	$	217,604	—	$	—	—	$	—	—	$	—	$	—	$	—	$	(2,041)	$	(1,248,771)	$	—	$	(1,033,208)
Granted	560,524	—		—	—		—	—		—	—		—	—		—	—		—	—		—		—		—		—		—		—
Forfeited	(560,524)	—		—	—		—	—		—	—		—	—		—	—		—	—		—		—		—		—		—		—
Unit-based compensation	—	3		—	—		—	—		—	—		—	—		—	—		—	—		—		—		—		—		—		—
Accretion of class C Units to redemption value	—	4,844		—	—		—	—		—	—		—	—		—	—		—	—		—		—		—		(4,844)		—		(4,844)
Preferred Return	—	—		—	2,323		—	4,590		—	—		—	—		—	—		—	—		—		—		—		(6,913)		—		(6,913)
Provision for warrants	—	—		—	—		—	—		—	—		—	—		—	—		—	—		74,280		—		—		—		—		74,280
Exercise of warrants	—	—		—	—		—	—		16,379,606	120,134		—	—		—	—		—	—		(16,154)		—		—		—		—		103,980
Net loss pre business combination	—	—		—	—		—	—		—	—		—	—		—	—		—	—		—		—		—		(19,178)		—		(19,178)
Other comprehensive loss pre business combination	—	—		—	—		—	—		—	—		—	—		—	—		—	—		—		—		(14)		—		—		(14)
Recapitalization of Preferred Units, Class C Units, Class A Voting Units, and creation of NCI (net of transaction costs of $37,104)	(24,922,109)	(173,460)		(24,041,300)	(240,408)		(47,508,300)	(475,072)		(411,305,888)	(337,738)		—	—		60,844,573	6		416,933,025	42		—		1,191,567		—		—		(301,973)		551,904
Recapitalization of SVF equity, PIPE, and FPA (net of transaction costs of $30,315)	—	—		—	—		—	—		—	—		50,664,146	5		—	—		—	—		—		40,425		—		—		381,276		421,706
Net loss post business combination	—	—		—	—		—	—		—	—		—	—		—	—		—	—		—		—		—		(1,314)		(12,383)		(13,697)
Other comprehensive loss post business combination	—	—		—	—		—	—		—	—		—	—		—	—		—	—		—		—		(84)		—		(804)		(888)
Balance at June 25, 2022	—	$	—	—	$	—	—	$	—	—	$	—	50,664,146	$	5	60,844,573	$	6	416,933,025	$	42	$	58,126	$	1,231,992	$	(2,139)	$	(1,281,020)	$	66,116	$	73,128

(1) As part of the Business Combination (as disclosed in Note 3, Business Combination and Note 12, Membership Interests), all per share information has been retroactively adjusted using the Exchange Ratio as stipulated by the Merger Agreement

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Symbotic Inc.

Unaudited Consolidated Statements of Changes in Redeemable Preferred and Common Units and Equity (Deficit)

(in thousands, except unit and share information)


	Three Months Ended June 26, 2021
	Redeemable Preferred and Common Units												Additional Paid-In Capital - Warrants		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Equity (Deficit)
	Common Units, Class C			Preferred Units, Class B-1			Preferred Units, Class B			Common Voting Units, Class A
	Units	Amount		Units	Amount		Units	Amount		Units	Amount
Balance at March 27, 2021	428,571	$	1,874	1	$	226,748	1	$	448,078	5,997,632	$	16,809	$	—	$	(2,506)	$	(926,186)	$	(911,883)
Retroactive application of recapitalization ratio (1)	24,493,538	—		24,041,299	—		47,508,299	—		361,551,314	—		—		—		—		—
Adjusted balance, beginning of period	24,922,109	$	1,874	24,041,300	$	226,748	47,508,300	$	448,078	367,548,946	$	16,809	$	—	$	(2,506)	$	(926,186)	$	(911,883)
Granted	—	—		—	—		—	—		—	—		—		—		—		—
Forfeited	—	—		—	—		—	—		—	—		—		—		—		—
Unit-based compensation	—	30		—	—		—	—		—	—		—		—		—		—
Accretion of Class C Units to redemption value	—	53,251		—	—		—	—		—	—		—		—		(53,251)		(53,251)
Preferred Return	—	—		—	2,765		—	5,464		—	—		—		—		(8,229)		(8,229)
Provision for warrants	—	—		—	—		—	—		—	—		26,999		—		—		26,999
Net loss	—	—		—	—		—	—		—	—		—		—		(37,771)		(37,771)
Other comprehensive loss	—	—		—	—		—	—		—	—		—		1,024		—		1,024
Balance at June 26, 2021	24,922,109	$	55,155	24,041,300	$	229,513	47,508,300	$	453,542	367,548,946	$	16,809	$	26,999	$	(1,482)	$	(1,025,437)	$	(983,111)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Symbotic Inc.

Unaudited Consolidated Statements of Changes in Redeemable Preferred and Common Units and Equity (Deficit)

(in thousands, except unit and share information)


	Nine Months Ended June 25, 2022
	Redeemable Preferred and Common Units																					Additional Paid-In Capital - Warrants		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Noncontrolling Interest		Total Equity (Deficit)
	Common Units, Class C			Preferred Units, Class B-1			Preferred Units, Class B			Common Voting Units, Class A			Common Shares, Class A			Common Voting Shares, Class V-1			Common Voting Shares, Class V-3
	Units	Amount		Units	Amount		Units	Amount		Units	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance at September 25, 2021	428,571	$	144,975	1	$	232,278	1	$	459,007	5,997,632	$	16,809	—	$	—	—	$	—	—	$	—	$	26,999	$	—	$	(2,092)	$	(1,154,944)	$	—	$	(1,113,228)
Retroactive application of recapitalization ratio (1)	24,493,538	—		24,041,299	—		47,508,299	—		361,551,314	—		—	—		—	—		—	—		—		—		—		—		—		—
Adjusted balance, beginning of period	24,922,109	$	144,975	24,041,300	$	232,278	47,508,300	$	459,007	367,548,946	$	16,809	—	$	—	—	$	—	—	$	—	$	26,999	$	—	$	(2,092)	$	(1,154,944)	$	—	$	(1,113,228)
Granted	1,052,952	—		—	—		—	—		—	—		—	—		—	—		—	—		—		—		—		—		—		—
Forfeited	(1,052,952)	—		—	—		—	—		—	—		—	—		—	—		—	—		—		—		—		—		—		—
Unit-based compensation	—	52		—	—		—	—		—	—		—	—		—	—		—	—		—		—		—		—		—		—
Accretion of Class C Units to redemption value	—	28,433		—	—		—	—		—	—		—	—		—	—		—	—		—		—		—		(28,433)		—		(28,433)
Preferred Return	—	—		—	8,130		—	16,065		—	—		—	—		—	—		—	—		—		—		—		(24,195)		—		(24,195)
Provision for warrants	—	—		—	—		—	—		—	—		—	—		—	—		—	—		74,280		—		—		—		—		74,280
Exercise of warrants	—	—		—	—		—	—		43,756,942	320,929		—	—		—	—		—	—		(43,153)		—		—		—		—		277,776
Net loss pre business combination	—	—		—	—		—	—		—	—		—	—		—	—		—	—		—		—		—		(72,134)		—		(72,134)
Other comprehensive loss pre business combination	—	—		—	—		—	—		—	—		—	—		—	—		—	—		—		—		37		—		—		37
Recapitalization of Preferred Units, Class C Units, Class A Voting Units, and creation of NCI (net of transaction costs of $37,104)	(24,922,109)	(173,460)		(24,041,300)	(240,408)		(47,508,300)	(475,072)